Whether you just moved in together, got engaged or married, money is a leading cause of disagreement
for couples.
Communication is known to be the cornerstone of a successful relationship.
But when it comes to money, many partners don't broach the subject until after they're
in financial trouble, or have serious gripes.
Managing your own money can be challenging enough.
But incorporating your spouse’s finances can be overwhelming.
In other words, don’t expect to be an expert right away.
The two of you, have some things to work out, and should take plenty of time to do so.
Follow these 10 steps, so you and your partner can easily get accustomed to healthy financial
habits.
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#1, Be open about your debt, and current financial status.
The most important thing you can do, to effectively manage money as a couple, is to be as open
and honest as possible, about the current state of your finances.
Letting your partner know about your debts, loans, credit history and money goals can
keep an honest stream of communication, and ensure that there are no unwanted surprises
in the future.
Be clear with each other on how you feel that money should be handled, what you hope to
invest in, and what your financial goals look like.
#2, Design a Budget.
Start by reviewing your joint expenses over the last few months, to determine how much
you’ve been spending, and if you need to bring that amount down.
Then, establish dollar limits per category that you create, according to your after-tax
income.
Don’t forget to allocate for unexpected or irregular expenses, such as routine car
maintenance, or doctor’s appointments.
Your budget may be a work in progress, so don’t worry if you have to make adjustments,
especially over the first few months.
#3, Decide who pays for what.
Regardless of how you decide to manage your money, there are a number of things you also
must consider when planning your lives together.
Every household has to decide who pays for what.
Unlike your past experiences with roommates, however, in your relationship you probably
won’t want to keep pantry items separate.
You also have a vested interest in paying bills on time to preserve your credit.
While it’s not the most romantic part of moving in together, newlyweds need to talk
about household logistics, who pays which bill, how you will reimburse each other, and
how you will work toward shared goals.
Plan to sit down and discuss these logistics, to make sure you both understand and agree
on the plan, and to make sure all your bases are covered.
Once it’s decided who will pay which bills, automate the payments so you’re never late,
and your partner never has to worry.
Now is also the time to discuss retirement and longer-term goals, such as buying a house,
or taking a dream vacation.
Make sure you’re both contributing to retirement accounts, and set up an automated system,
to contribute to your savings for those long-range goals now.
#4, Discuss your goals.
Take the time to honestly discuss your short and long-term financial goals, whether they
are to save for a home, pay off credit card debt, or finally get that motorcycle.
Be careful not to criticize your partner’s goals, remember they are just as important
to him or her, as yours are to you.
From there, work together to make a list of the top goals you both want to achieve, making
sure it’s both fair and manageable.
If you’ve already been with your partner for awhile, try to have regular check-ins
about your goals.
They may change over time, and you’ll want to reprioritize together.
This is especially important if your family is growing.
#5, Build an Emergency Fund.
If you don’t already have an emergency fund, consider making this a top priority.
An emergency fund, is money that is set aside in case something expensive happens unexpectedly,
such as a lost job, family illness, natural disaster, or a major home repair.
Aim to save about 6 months’ worth of your household expenses, in case the emergency
is that you have no income.
Building an emergency fund should be a priority, because it will bring financial security,
and protect your relationship in case disaster strikes.
#6, Consider having two bank accounts each.
Opening a joint bank account, is a great idea when you’ve decided to share finances.
However, giving control of all of your money to another person, can be not only risky,
but cause avoidable fights.
Consider opening up one shared account, and one separate account for income that you wouldn’t
otherwise spend, on things involving the other person.
This can ensure you to work together towards goals, and be open about money, while retaining
a little bit more of your individuality, and control over your finances.
Being in a newly-committed relationship, is an exciting feeling.
Don’t let awful money fights ruin your romance, when they could be avoided.
By being open with your partner about finances, and saving for both fun and practical things
together, you can not only maintain your couple status, but strengthen it.
#7, Financial discipline.
As you discuss the budget, both of you must realize you cannot spend more than you make,
if you want to have financial security.
Your wants, needs and desires, must be combined with your spouse’s, and the new total must
be less than your family income.
Be realistic about what you can afford.
One of the biggest traps I see young couples fall into, is trying to have everything their
parents have.
Remember, your parents took many years to get to where they are.
Just because you got married, doesn’t mean you have to overextend your finances, in order
to buy a house and all the stuff to put in it.
In fact, I recommend newlyweds, not make any major financial decisions, during their first
year together.
As you get your spending under control, it’s also important to look to the future.
Set short-term and long-term financial goals.
What do you want your financial profile to look like in one, five and 20 years, and what
do you have to do to get there?.
#8, How to Talk About Money.
Try to avoid seeing a financial discussion as a hostile negotiation, as difficult as
that might be.
Instead, look at the opportunity to discuss finances as a positive one, that will see
you both clarify what your future will be together.
Whether you want to know about your partner’s financial past, or come up with a plan for
your future, it’s a conversation you’ll have to have sooner or later.
If you don’t want to set a date and time, to sit and discuss your finances formality
often doesn’t help.
when it comes to wanting to have this conversation, then just bring up a financial subject during
conversation.
Ask your partner what they think about the latest news, about house prices or interest
rates, or find an article online that you enjoyed reading, and go from there.
A chat about the news can quite easily transition into, “do you think it’s time we discussed
our own finances”, without it feeling like it has come out of the blue.
#9, You Can Do It.
It is important to recognise that you’re probably going to disagree on some things
here, but usually it will be something you can compromise on.
Exceptions might include, if your partner is spending hundreds of dollars a month, on
gambling behind your back, or has huge debts they haven’t previously told you about,
which may make you question the relationship, but generally once you start to have the conversation,
you will find it easier than you dreaded it would be.
#10, Working as a team makes you more successful.
While conversations about money with your partner can get feisty, don't let anger or
resentment get the best of you.
Explain your thoughts and feelings logically, and ask your partner whether he or she, is
willing to work as a team to be successful.
When you're a committed couple, it's smart to strategize and organize your life in unison.
You can accomplish much more together than you ever could apart.
Many people need help creating a financial plan, so don't hesitate to check out some
of the links i've left down in the description below, which includes a 30-day free trial
of audible, and 2 free audiobooks of your choice, as well as a list of some books on
money i'd recommend cheking out with your free trial.